Tough ruling to be issued soon for tax evaders<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
A joint decree from the Ministry of Finance and Ministry of
\nJustice and Human Rights that allows for the jailing of
\nrecalcitrant taxpayers for a maximum one year without trial will
\nbe signed next week, according to a senior tax official.<\/p>\n
Director General of Taxation Hadi Poernomo said on Tuesday
\nthat the decree would be effective as soon it was signed.<\/p>\n
\"We are still waiting for the Minister of Justice and Human
\nRights (Yusril Ihza Mahendra) who is still on an overseas trip,\"
\nhe told reporters, adding that the two ministers had in principle
\nagreed to the contents of the decree.<\/p>\n
The joint decree, which was supposed to be signed in April,
\nwas expected to help boost tax compliance and increase tax
\ncollection revenue.<\/p>\n
According to the directorate's data, tax arrears during the
\npast 10 years amounted to around Rp 17 trillion (about US$2.4
\nbillion).<\/p>\n
Such huge tax debts partly explain the country's tax ratio of
\nonly around 13 percent of gross domestic product (GDP), compared
\nto the ratio in neighboring countries of around 40 percent.<\/p>\n
As the cash-strapped government is desperately looking for
\ndomestic revenue sources to finance the state budget, boosting
\ntax revenue by revamping the tax administration area is seen as a
\ncrucial step.<\/p>\n
According to regulation No. 137\/2000, which came into effect
\nearly in 2001, the tax office is actually allowed to detain tax
\nevaders. However, this apparently was not effective due to the
\nlack of support from the Ministry of Justice and Human Rights,
\nwhich has the authority over penitentiaries.<\/p>\n
So far measures taken by the tax office against uncooperative
\ntaxpayers mainly focus on seizure of assets and travel bans.<\/p>\n
Based on the joint decree, temporary detention is imposed on
\nnon-cooperative taxpayers who have a tax obligation amounting to
\nmore than Rp 100 million to either the central or local
\ngovernments.<\/p>\n
Prior to imposing detention, the tax office will send a letter
\nto tax evaders asking them to pay their taxes within 21 working
\ndays. If the letter is ignored, the tax office will issue a
\n\"distress warrant\" demanding the taxpayers settle their tax
\nobligation within 14 working days. If the taxpayers still refuses
\nto comply, without a reasonable explanation or any attempt to
\nappeal to the tax court, the tax directorate would start the
\nprocess of sending the unscrupulous taxpayer to jail.<\/p>\n
But there is skepticism that even with the introduction of the
\njoint decree, tax evaders can still avoid their obligations by
\nbribing corrupt tax officials.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/tough-ruling-to-be-issued-soon-for-tax-evaders-1447893297",
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"sponsor": "Okusi Associates",
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